Government Proximity,Public Investment and County Economic Development
Clarifying the vertical relationship among Chinese local governments is an important prerequisite for optimizing the sub-provincial financial system and empowering them to reduce their burden.The problem of imbalanced economic development among counties in China has always existed.On the one hand,this is reflected in the horizontal imbalance of economic development among counties in regions with different levels of productivity.On the other hand,within the same region,there is also a vertical imbalance in economic development among counties.Specifically,the relative location conditions of counties play a key role in influencing vertical imbalance in development.The relative positional relationship between counties and surrounding economic entities has been a focal point of academic research.In this study,starting with the location characteristic of the distance between counties and municipal governments and based on the increasingly common reform of relocating Chinese government sites,a multi-temporal double-difference model is constructed to identify the causal effect between the proximity of municipal governments on the economic development of counties.The results reveal that(1)government proximity has a significant economic effect,i.e.,a county experiences faster economic growth after obtaining the proximity advantage of the municipal government,and in terms of the dynamic trend,this economic growth effect is sustained rather than short term.(2)The policy effect is heterogeneous,with a significant policy effect for areas with close initial distance,a high degree of fiscal decentralization,and low fiscal pressure.Further,the economic benefits caused by government proximity are concentrated in the growth of the secondary industry.(3)In terms of the impact mechanism,an increase in public investment is an important way to realize the proximity advantage.On the one hand,the proximity of a higher-level government increases the possibility of neighboring counties receiving investment,and on the other hand,proximity to a higher-level government stimulates a county's motivation to develop the economy.(4)We also find that the effect of government proximity on private capital and population is negative and fails to lead to the improvement of county economic efficiency,indicating that the economic benefits of government proximity are mainly driven by capital-intensive industries rather than improvement in efficiency.However,when the regional institutional environment improves,government proximity can promote high-quality county development.Therefore,this study contributes to a deeper understanding of the political triggers of economic interactions between upper and lower levels of government and provides a theoretical basis for promoting high-quality economic development.This study makes three significant contributions to the field.First,we identify the causal effect of government proximity on county-level economic growth from the perspective of spatial distance and deeply analyze the underlying mechanisms of this proximity effect.We expand the existing literature on county-level economic development from the perspective of intergovernmental relations.Second,we utilize rich spatial big data to analyze the influence of government proximity on the behaviors of upper-and lower-level governments from the perspective of public investment decision-making at the municipal and county levels.This also provides new micro-level evidence for clarifying the division of powers and responsibilities between upper-and lower-level governments.Lastly,by measuring the efficiency of economic growth driven by public investment through the measurement of county-level total factor productivity and combining differences in institutional environments,we provide theoretical evidence for the high-quality development of counties.
Government ProximityPublic InvestmentCounty EconomyHigh-Quality Development
NETL
NSTL
万方数据
